RBI Eyes 1 Billion UPI Users: India's Digital Payments Set for Boom
Overview
Reserve Bank of India Deputy Governor T Rabi Sankar projected India's Unified Payment Interface (UPI) user base could surge to 1 billion, more than doubling from 400 million. This expansion aims to boost financial inclusivity and potentially add 0.3% to GDP for every 10% increase in digital payments. India already leads global retail transaction volumes, and UPI's reach is expanding internationally.
UPI Poised for Massive Growth
Reserve Bank of India Deputy Governor T Rabi Sankar announced on Tuesday that India's Unified Payment Interface (UPI) platform has the potential to grow its user base to 1 billion, a significant leap from the current 400 million active users. This projection highlights substantial room for expansion in the nation's digital payment ecosystem.
India's Digital Payment Prowess
While India accounts for approximately 50% of global retail payment transactions, Sankar pointed out that per-person digital transaction volumes still trail advanced economies. He cited Kenya, where digital transactions per capita are roughly double India's rate, indicating a clear opportunity for growth.
Financial Inclusivity and Economic Boost
UPI's expansion has been a key driver of financial inclusivity, enabling individuals, such as homemakers, to run small businesses securely. A study cited by Sankar suggests a 10% rise in digital payments could contribute an additional 0.3% to the country's Gross Domestic Product (GDP). The National Payments Corporation of India (NPCI), which operates UPI, has been instrumental in this growth, even extending UPI access to feature phones.
Cybersecurity and Global Reach
The Reserve Bank is actively enhancing cybersecurity measures to combat digital fraud, implementing tools like 'mule hunter'. Digital payment transactions have seen a compound annual growth rate (CAGR) of 41%, soaring from Rs 2,071 crore in FY 2017-18 to Rs 22,831 crore in FY 2024-25. UPI now processes about 81% of all retail payment transactions by volume in India. The platform is also being integrated with payment systems in other countries, with live linkages in Singapore and ongoing projects with the UAE and Nepal, alongside acceptance by merchants in countries like Bhutan and France for Indian travelers.
